>> we certainly will. let's send it over now to kyra phillips. >> 9:00 am on the east coast. 6:00 am out west. british tabloid news of the world should down, owner rupert murdoch, the murder victim's family, says has not apologized. urgent talks on how to slash spending head back to the table today. we begin with more stunning allegations against british tabloid "news of the world." "the daily mirror" is reporting that staffers with the now defunct paper tried to hack into the phones of 9/11 victims. owner rupertmurdoch arrived in london. zain verjee has all the details.

>> british tabloid "the mirror" is quoting a former new york city cop that's making these allegations that "news of the world" journalists tried to hack into the mailboxes and voice mails of victims of 9/11. now, this former cop says he was contacted by "news of the world" journalists who said they would pay him to retrieve these phone records right the way through and to 9/11, calls to the relatives, to give them the ability to see exactly who the victims were talking to up until 9/11. this former new york city cop is now a private investigator and he is saying, according to "the daily mirror" report, that he turned this down. absolutely no way. i am not going to do this. a little bit of caution here, it is only "the daily mirror" here that is reporting this supposed 9/11 hacking claim. we don't know for a fact, kyra, whether it actually did happen. >> all right. meanwhile, the family of this murdered girl, whose phone was hacked, is going to meet with

the deputy prime minister, right? >> right, exactly. i mean, there is so much outrage over that. what the family wants is an apology from rupert murdoch. that's not happened. public opinion here is so far out ahead of the government. people are so outraged over that story as well as the overall situation with "news of the world" that the government is really jumping up here and needs to act. one of the things that they're considering is blocking this big deal, takeover bid by rupert murdoch of british sky here. people don't want to see that deal go through, kyra. >> we'll continue to follow that story. i have a feeling a lot more is going to break, it's just starting to unfold. zain, thanks. trying to broker a deal. in less than two hours from now, he will turn to the public with a news conference.

dei dan lothian joins us from the white house. >> reporter: medicare and social security they don't want touched by this deal and on the other side, republicans are saying no tax hikes at all. you're seeing the president using his bully pulpit, if you will, for the second time now in as many weeks, the president holding a press conference, a chance to try to get both sides to sit down and hammer out an agreement and spell out what the consequences will be if that debt ceiling isn't raised by august 2nd. the president, aides tell me, will continue to push for what's being called that bigger deal, up to $4 trillion in spending cuts and also tax hikes. the reason for that is because the president believes that this is the best thing for the u.s. economy in the long term. >> all right. dan, let's get the view from

congress now. kate baldwin on the hill. kate, what is the reaction or expected reaction to the meeting? >> reporter: kyra, the reaction and statements we're getting, following the meeting between democrats and republicans, very little progress has been made toward a deal as both sides appear to be dug in, if not more dug in, especially on the issue of taxes. just a couple of statements that are really politically charged coming out last night. spokesman for the republican leader in the senate, mitch mcconnell, saying in a statement, calling it, quote, baffling that democrats and the president try to continue to raise taxes in the middle of a job crisis. at the same time, almost as it was firing back, harry reid, his spokesman charges that republicans are continuing to try to take the easy way out. republican says there's no support for tax increases. democrats say revenue has to be

part of this deal if they're going to the suggest significant spending to cuts. something needs to be done, it seems, between these negotiators. how we get there seems to be a big question. >> sure is. we'll continue to try to find the answers from you and dan. thanks, guys. stay with us for president obama's news conference. it's scheduled for 11:00 eastern. you can see it right here on cnn. the white house will withhold $800 million in aid to pakistan's military. the u.s. is trying to pressure pakistan to crack down on militants. meanwhile, a suicide bomber struck at a rally, six people were killed there, another 15 wounded. an explosion at a naval base in cyprus when munitions on a cargo ship caught fire. the blast was so huge, it knocked out power to the nation's largest electricity plant, which is right near that

base. conservative christian group has retracted a controversial package about slavery from its marriage pledge but not before two presidential candidates actually signed on to it. deputy political director paul steinhauser has the rest of the story here, read iing between t lines. >> a lot of of people talking about this story, iowa, first caucus state. family leader, one of the top social conservative groups in iowa. very, very important, constituents in iowa. and we're talking about traditional marriage, a pledge for the candidates to sign, to promote fidelity with your spouse and promote traditional marriage, not same-sex marriage. the preamble says slavery had a disastrous impact on african-american families yet sadly a child born into slavery in 1860 was more likely to be

raised by his mother and father in a two-parent household than was an african-american baby born after the election of the u.s.a.'s first african-american president. that's where the trouble started. they took that preamble out. it's no longer in the pledge. two candidates had already signed that pledge, michele bachman, the congresswoman from neighboring minnesota and the former senator from pennsylvania. both those campaigns are doing a bit of damage control. here is what the bachman team said. in no uncertain terms, congresswoman bachman believes that slavery was horrible and economic enslavement is also horrible. and senator santorum's aide has also responded. >> michele bachman also involved in a war of words with tim pawlenty, right? south florida all about iowa.

crucial state. first caucus state. very important for bachman to do well in, and pawlenty. he's known as mr. nice guy. the last couple of days, he has had tough words against bachman saying her record is nonexistence. she said we're only a month away from a crucial straw poll in iowa. i think you'll hear more of this battle between republican candidates. >> thank you so much. you can get the latest political news on cnnpolitics.com. nasa is tracking space debris that may threaten the international space station. right now, they don't know that it will put the crew in any jeopardy. they do know it will come close to the iss tomorrow, the same time that the u.s. astronauts plan a spacewalk. it was a busy weekend, ranging from polo matches to making clay figures with kids on

skid row. we'll get all the details on will and kate's trip to l.a. to celebrate a job well done, why not just blow up the boss' car? we believe doing the right thing never goes unnoticed. liberty mutual insurance. responsibility. what's your policy?

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checking stories cross country. funeral services will be held today for the fan who fell to his death, trying to catch a foul ball into the stands. the club is already working on making changes to fan safety there at the stadium. this is in provo, utah. sales team at adaptive computing really know how to celebrate hitting its sales goal. with the boss' permission, the team got to blow up his 1995

mitsubishi as award for a job well done. longview, texas, michael brown is the biggest baby ever born there. are you ready for this? 16 pounds. he was delivered by c-section, of course. and his parents say no more kids. prince william and his bride, kate, wrapping up their american tour. they're back in the uk now, but not after leaving quite an impression on the folks in l.a. max foster has the rest of their tour. >> reporter: after taking canada by storm, it was time to visit california. the tubing and duchess invited some friends around to the consul general's house where they were staying. off to central barbara for a game of polo. the duke was, in his words, looking forward to letting loose after a couple of busy days. his team won and the duchess presented her husband with a trophy and a kiss. the duchess has arrived and she

hasn't disappointed. the dress by alexander mcqueen wowed the hollywood a listers inside. from the red carpet to skid row. they threw themselves into an art class for kids from a deprived neighborhood. the duchess showing her skills. and the last engagement was a war veteran's job fair. very successful north american tour. in many ways, this is the most important stop. particularly for the duke. >> i would just say on behalf of us both how grateful we are to be welcomed so warmly in the golden state and city of angels. thank you so much. >> the public would have liked to have gotten closer to the couple in america. the trip has confirmed them as the biggest stars on the planet right now. >> max foster is joining me live from l.a. were they as big of a hit in l.a. as they were in canada,

max? you've been following them since the beginning. >> i think they were. it was just a different sort of of vibe, i guess. in canada, these huge crowds turned out all the time and the couple would go into them and chat directly with the crowds. the crowds didn't get the same sort of opportunities here in los angeles. there's so much buzz around them. so, people were excited that they were here. this is a scene, for example, on canada day in ottawa at the start of the tour. and this is what got everyone so excited here. a bit more low key about promoting british interest. there, it was about representing canada. i have to tell you, this immense tour, looking forward to going back to north wales. i've been told they're going to go back there and disappear for a while. they're probably exhausted after all this. but they certainly made an impact. >> it's exhausting, charming people around the world, max. come on. you were there. you saw it. max foster, thanks so much. >> coming up, halle berry calls the police not once, but twice over the weekend.

we'll have the details in your "showbiz" headlines. he showed us he can handle a camera almost as well as a soccer ball. what david beckham is saying about the birth of his daughter.

your "showbiz" headlines now. halle berry dialed 911 on sunday, according to tmz that was her second call this weekend, after spotting an intruder on her property. no arrests were made. and the not so friendly skies, octomom, nadya suleman and kirsten johnson when

suleman's eight kids started crying. when "the third rock" from the sun asked that she keep her babies quiet, suleman responded why don't you grow a baby and get a life? hudson has a baby boy. david beand victoria beckham ha a baby girl. who can forget that beautiful picture of his wife. all these stars having babies. hey, zain. >> including you, too, kyra. harper seven. what do you think of that name? harper seven. >> harper seven? >> that's the baby girl's name. >> when you know the meaning of seven, you think it's pretty cool. >> yeah, right. david beckham put out this statement. he said this, kyra. i'm so proud, so excited to

announce the birth of our daughter, harper seven beckham. she weighed 7 pounds, 10 ounces and arrived at 7:55 this morning here in l.a. victoria is doing really well and her brothers are delighted to have a baby sister. i was looking at a lot of the reaction online. and there was one i really liked, kyra. someone said harper seven, it sounds like half past seven, right? >> when was she born? >> born july 7th at 7:55. it was just past half a 7:00. someone said why didn't they call her after eight? >> what was his number? i thought he was number seven. >> yeah. well, the number is significant because david beckham's football jersey from manchester united and for england, he wears the number seven.

>> there we go. >> that's what people are saying, right? that that's why. it's lucky seven, too. who knows. they're happy to get a baby girl. they knew they were going to get a girl and they were pretty excited about it. victoria beckham was just saying she just wants a girl, someone she can go shopping with and do makeup with. they're very happy. harper seven, though, is her name. >> all right. zain, thank you so much. >> do you like it? >> yeah. you know me, i love unique names. you always want something that stands out and has meaning and that definitely does. every time i hear harper, i think of harper magazine. >> right. >> we'll be chatting again. when it comes to this tough economy, celebrities are not immune. foreclosure hits even the rich and famous. today, a new name. alison kosik. >> who is the latest? carney wilson, we all known her as the woman who has publicly

battled weight wishes and daughter of the beach boys brian wilson. she has defaulted on her mortgage from tmz, reportedly owing $1.6 million on her l.a. home, kyra. tmz says the auction for this home is set for next week unless she pays up. she's not alone. she joins a growing list of celebs who lost their homes. nicholas cage, jose canseco, michael vick, aretha franklin are on the list, too. they may be celebrities but they're human, too. kyra? >> gosh, celebrities, they're often multimillionaires. why are so many of them losing their homes? >> you know what? there are a bunch of reasons. their neighborhoods -- they were slammed by the housing recession as much as the rest of america was. palm beach, florida, greenwich, connecticut, and prices fell so much that jose canco walked away

from his home. that's also known as strategic default. just because you're a celebrity doesn't mean you know how to manage your money. if you spend more money than you make, it can happen. and it happens. spending more than you make. more celebrities are losing their homes than noncelebrities, kyra. it's just that we know their names, it's just more public. ky kyra? >> it's true. alison, thanks. "news of the world" publishes its last edition and closes its doors. its troubles and for some who worked there are if far from over.

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britain's "daily mirror" reports that journalists of "news of the world" unsuccessfully try ied to hack into 9/11 victims' phones. cruise ship went down. at least 80 people have been rescued but about 100 more are still missing. the u.s. is withholding $800

million in aid to pakistan. top u.s. officials say it's meant to pressure pakistan to crack down on militants. now there's new evidence of just how strained the relations are between the u.s. and one of its most critical allies in the fight against terror. today, a defiant pakistan is shrugging off the white house decision to withhold $800 million in aid for that country's military. chris lawrence at the pentagon. we should talk about what all the money goes toward. it's sort of understandable when you think this is the country where they found osama bin laden. you wonder why the u.s. is giving so much money to its military. >> that's right. and, really, this is part of the whole fallout from the whole osama bin laden operation, kyra. basically, this money goes to help the pakistani military go after some of the insurgents and even terrorist forces that the u.s. wants to target on the pakistani side of the border. in other words, pakistan puts

about 100,000 men in this frontier area, mountainous area near the border where a lot of the insurgents are. the u.s. gives them about $300 million a year to help pay for those troops to be there. that's been suspended. also, a lot of equipment going to some of these troops. night vision goggles, helicopter spare parts, intelligence and reconnaissance equipment. all of this now has been suspended as part of this package. it's really the first time that the u.s. has held aid in direct response to a pakistani action, which the u.s. says is not cooperating fully in what it wants to do in terms of fighting terrorism on that side of the border. >> now you wonder, chris -- it will be interesting to track and see how much of a difference this does make and if, indeed, they do track militants even more after losing this money. no doubt this will affect the relationship between the u.s. and pakistan as well. >> that's right.

it's a very -- the word you keep hearing from officials, kyra, is complicated. we have a very complicated relationship with pakistan. and there is some element here. you know, that old saying about don't cut off your nose to spite your face, because we're giving them the money to go after the militants and insurgents that the united states has a vested interest in seeing captured or killed. but the relationship, obviously, is very difficult on both sides, because here at home, you have political pressure from congress. as part of the new defense spending bill, the secretary of defense and the secretary of state have to sort of write a report on exactly where this money is going before congress sort of loosens the purse strings and authorizes that money to go to pakistan. and on their side, their military was humiliated by that bin laden raid. there's a lot of pressure on the pakistan side to sort of stand firm and be tough with the u.s. at this point.

>> interesting to see what develops now, chris. chris lawrence at the pentagon, thanks. several security officers inside syria, fighting on protesters. amateur video posted on youtube. the u.s. state department suggests syrians are spying on protesters here in the u.s., helping to fuel the violence you're seeing right here. cnn foreign affairs correspondent jill dougherty basically saying this looks like spying. >> yes. they have reports, indications that some staff at the syrian embassy here in the united states have been going to demonstrations that syrians here in the u.s. have been holding against the syrian government and they've been videotaping these people. and then they also say that back in syria, the syrian government has retaliated against some of the families of those people who turned up at those

demonstrations. so, it's a worrisome thing. this actually started -- well, it started a while ago. the most recent incident, excuse me, is when the u.s. ambassador -- sorry -- robert ford went to the city of hama, a rested city, site of some very serious demonstrations and very serious crackdown. he went there, spent the night, spent another day and, remember, on friday we had a report about how his car was mobbed by friendly syrians. this is really getting pretty personal. >> what's the deal with the ambassador's facebook page? >> the u.s. ambassador, robert ford, has a facebook page, the embassy does. he put a posting up there. he said that they had, on saturday, demonstrations that were taking place against the u.s. embassy. people, syrians, throwing rocks and throwing food. in fact, eggs and tomatoes. on the facebook posting the

ambassador says that's pretty ironic, because the syrian government is allowing that demonstration to take place against the u.s. embassy, but is not allowing and, in fact, ruthly cracking down on demonstrations in other parts of the country. in another ironic aside, he said people ought to save the food that they're throwing for hungry syrians, who basically can't get food. kyra, i think it's interesting, too. i just went on that site, checked that facebook blog. there is a lot of response. obviously, this is a way of the u.s. government getting out its message on facebook. >> jill dougherty at the pentagon. thanks. looming crisis over our national debt. congressional leaders are returning to the white house in search of a deal that would slash trillions of dollars from government spending. they met last night for 75 minutes only to agree to return

to the table today. republicans say tax hikes are unacceptable. democrats oppose cuts to social security and medicare. 90 minutes from now, president obama will address the debt crisis 11:00 am eastern at a news conference at the white house. we will carry it live. a pathetic debt debate. harsh words from john avalon with 23 days to go before america defaults on its debt. our cnn contributor doesn't stop there. he says childish rhetoric is pushing america to its brink. you never hold back. what the heck is going on, with all this back and forth? you have this looming deadline and meanwhile how are we going to play the bills? >> that's right, we're playing this game of chicken with the american economy. you need to have revenue increases, spending cuts and entitlement reforms. that's what's being put forward.

however, liberals are opposing any spending cuts and conservatives are opposing any tax increases. >> is there anything that you think the president can say at this news conference at 11:00 am that would push the two sides into making a deal? >> i do. there are two things. one, to point out that the republican coalition is very focused on dealing with the deficit and the debt. if that's your number one priority, then you need to give a little. and tax reform, in particular, offers the opportunity to raise revenue without -- if you close tax loop holes, earmarks embedded in the tax code. if you close those, you could increase revenues without raising rates. that should be a place for compromise, something both parties have talked a lot about. you won't please the litmus test

folks. it's an opportunity for compromise. with everything, you have to define the common ground and build on it. that should be an area we can gre on and move this ball forward. >> who is the bigger problem for the president right now, democrats or the republicans? >> look -- >> as he laughs. >> both sides are very -- it's a great point. remember, the president is the one pushing the deal with the big deal package. put a $4 trillion deficit reduction on the table. democrats and liberal activists, in particular, were very angry and upset to hear that entitlement reform was on the table. folks on the far right are saying, look, if there's anything that raises any revenue, we're going to call that a tax hike. now, that change in the definition in the middle of the game on this case. you don't want to raise everybody's taxes if you're a republican. you need to find some way to get revenue. everyone has to get a little bit. to get the american economy on sound, long-term fiscal footing.

the far left and the far right may be unhappy, but that's usually a sign of a plan that can move forward to solve problems. >> john avalon, thanks for weighing in. we'll see what happens. >> thank you. we'll see. the nation's drug enforcement agency strikes a blow against medical marijuana. the dea says it's just as bad as hero heroin. also after the break, we'll talk to the man behind the ledge, a film where the atheists are the good guys. members of the american postal worker's union handle more than 165 billion letters and packages a year.

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the ledge. it's a movie about faith, love and religion. don't expect the chris craytian this film to be the good guy. how about an atheist as your hero? >> what did god do to make you so angry at him? >> look at the world that he created. all the beauty and the wars and plagues and genocides and e earthquakes and tidal waves. and then, after all that suffering, what does your god do next? he sends most of us to hell. >> matthew chapman wrote and directed this film with the hope that atheists would come out of the closet and be proud and

christians would apologize for being so judgmental. why did you make this film and why now? >> well, i mean, there hasn't been anything like this before. and i was -- you know, i've traveled a lot in the midwest and the south and seen a lot of people like joe, the fundamentalist in the film. and i've never seen a portrayal of that kind of a character put in conflict with someone who shares my beliefs, which are that there probably isn't any god and we need to think about, you know, reality in life in a rational, humane way. and that life would probably be better if we behaved that way. >> it's obvious in the film you are questioning faith. let roll another clip. >> you have to accept jesus christ as your lord and savior. that is your only entrance

requirement. >> the buddhists and -- they're all damned. >> and they have to accept jesus christ. >> and the catholics because they're not born again, right? >> right. >> as we heard from this one, too, if you don't accept jesus, you go to hell. what about everybody else? these two topics and debates are nothing new. so, what differentiates your movie from anything else that's been out there that sort of debates the issue of atheism? >> there haven't been a lot of discussions like this. second of all, it's a thriller. it opened in russia, for example, on 200 screens. it did better than "thor," came in only in third place to "pirates of the caribbean" and "kung fu panda." it's a very entertaining movie.

a whether you are interested in the underlying message or not. >> why do you think that is? because it's a thriller and these are some incredible actors or do you think it's the issue of atheism and the fact that the hero in this film is an atheist? >> i think it's a bit of both. the things we've seen happen in the past ten years as a result of faith, whether it be on the very extreme end, where you have people flying planes into buildings or whether it's the break that religion has put on social progress for gay people and women and women's rights, i think people are a little fed up with religion being this constant naysayer, constant pulling back of progress. and i'm kind of hopeful people will look at this film and say maybe there's a better way of looking at life than referring to books that were written in --

>> is it better looking at life as an atheist? 3% or 4% of people are atheist or agnostic. why are you still an atheist? that's a loaded question, isn't it? >> i mean, once you become an atheist, it's rather hard. if you took away all the bad things you had in religion, all the problems that religion causes to gay people, to women, to infidels, as all religions find a way of calling other religions, infidels, remove all the violence, it would still rather be like having a 40-year-old person wandering around, who believes in father christmas. it's all perfectly harmless. is that the kind of person you want, for example, running the country? and i don't know if you know

this, but the figures for the likelihood of atheist, an atheist becoming a presidential winner -- most would not consider voting for an atheist candidate. an up popular view to have. what can you do? if you believe it, you believe it. >> thank you for talking with us about it today. >> thank you. >> if you would like to read more about this story go to our belief blog at cnn.com. cnn medical correspondent elizabeth cohen is here to talk about what the new memo says. whats to that mean for medical marijuana and that industry?

>> exactly. that's an excellent question. this memo came from the drug enforcement agency. they put it in black and white, very simple. they said marijuana does not have a medical use and it has a high potential for abuse. so, they sort of just said there's a lot of debate here. they said this is where we stand. they have said it before. this is the first time they've said it in many years. >> let's talk about the states where medical marijuana is legalized. what does that mean for the people using it? >> you can use medical marijuana as long as you get your card and all of that. what that means for those people is probably nothing. kind of surprising, right? feds lay down the law that you can't use it. dea doesn't intend to go after individuals. they may go after large organizations but don't tend to go after individuals. those individuals are probably pretty safe right now. >> will pro-marijuana groups fight this decision? >> they said they have. they welcome this decision, which is sort of surprising. but because they say this is now in black and white and recent that they can appeal it.

they can actually take it to court. they say at the end of the day, they will win. >> we'll see what happens. elizabeth, thanks. >> thanks. incredible story. actually, we're hearing a pretty amazing interview. a lot of people in waiting to hear from jaycee dugard, speaking publicly for the very first time. she was the young girl held in cap activity fe captivity for 18 years.

checking stories now cross country. >> what's going on? >> a grown man just attacked my

son from behind. and they're still fighting out here. >> they're still fighting? >> these people are crazy. yes. >> that call came during a youth baseball tournament in castle rock, colorado. a fight broke out after a bad call. three parents, one of them a town prosecutor faced criminal charges of assault now. police say it's hard to tell who actually started that fight. los angeles may be a priceless piece of history. its owner wants at least $95,000 for a piece of the american flag that wound up flying on the moon after apollo 11. you'll get an autographed picture along with the flag of neil armstrong. after catching derek jeter's 3,000th hit, he gave it back. it's worth up to $250,000. lopez got free tickets for the rest of the season.

kidnapping victim jaycee dugard said she did what she did to try to survive during her 18 years of captivity. kidnapped at age 11 by a sex offender, she endured horrible abuse and gave birth to two children. now, at the age of 31, she's talking about it. >> there was not a day that i didn't cry. i felt like there would never, ever be a day that i wouldn't cry again. and then, after a while, i told myself i can't cry anymore. >> what's the most haunting memory? >> that lock, hearing the lock. i know i said that earlier, but for some reason that -- and the bed. it was a squeaky bed. squeaky pull-out bed. i guess the noise -- the sounds.

it's weird what sticks in your head but sounds. >> how did you stay sane? >> i was still alive. there was still hope. >> i am trying to imagine how you are coping. i am trying to imagine. >> i don't know. i can't imagine being beaten to death, you know but, and you can't imagine being kidnapped and raped. so you just do what you have to do to survive. >> and her kidnappers, phillip and nancy garrido are serving long prison sentences now. dugard's book is titled "a

stolen life." we are in da mass cass. what is happening there? >> reporter: it appears to be under control but according to a u.s. official, the embassy was tacked by a mob. the building sustained some damage. no personnel were injured. the syrian government was slow. the u.s. embassy is calling the government to abide by the protections required. the windows are cracked. graffiti has been sprayed. the u.s. embassy flag has been damaged but the flag continues to fly. the officials said this was an unfortunate distraction, because the syrian government continues to beat, torture and kill people that want to protest. he couldn't characterize the mob but he noted it is still ironic the government allows this type of a protest to go on but won't allow protests where people have no weapons and are only carrying

olive branches to take place. the relationship between syria and the u.s. has been fairly tense since the u.s. ambassador took a trip earlier in the week. kyra? >> we also hear that the french embassy has been attack ed? >> is this connected? >> the french embassy was attacked as well. there are numerous reports about that. that information has not yet been able to confirm. both the french and the u.s. have, in fact, the embassies, have seen demonstrations in the past. in some cases, they have had eggs and tomatoes thrown at them. a lot of anger is being geared towards france because it is leading the charge trying to pass the united nations resolution condemning the syrian government. a lot of anger and frustration being targeted for that reason as well and also because a lot of those that support the government perceive the u.s. as meddling in their affairs. they perceive the u.s. as being

on the side of the anti-government demonstration. somehow implicit in this conspiracy theory to try to bring down the regime. arwa dam on the phone for us. tour de france riders go down in a pileup while a car knocks down another cyclist. we will have the latest. [ male announcer ] things seem better with travelocity's best price guarantee. our girl's an architect. our boy's a genius. we are awesome parents! biddly-boop. [ male announcer ] if you find a lower rate on a room you've booked, we won't just match it.

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the stories making news later today, president obama hold ag news conference at the white house on those debt reduction talks at 11:00 eastern. at 1:00 eastern, the jobs for america's summit being held in the u.s. chamber of commerce in washington and the girlfriends of reputed boston mob boss,

katherine gray, appears for a bail hearing in boston at 2:30 eastern. following lots of developments in the next hour of "cnn newsroom," let's check in with dan lothian at the white house. >> that press conference from president obama will be the second in many weeks as he tries to put pressure on both democrats and republicans to find some areas of compromise to get the debt ceiling raised. i will have more on that story at the top of the hour. >> i'm allison cos sikosik at t stock exchange. couldn't get a mortgage? that is all about to change. i will have details in the next hour. >> i'm max foster in los angeles. i will have all the pictures from the whirlwind royal tour of california in the next hour. >> sounds good, guys. well, the royal couple also visited an art center for intercity kits on their final day in california.

we will talk to the kids about what they thought of will and kate.

after one of the most exciting finishes in women's world cup history a crossing pass at abbey womwak, that score in the final minutes of extra time, tied to match with brazil at two. the u.s. won on penalty kicks.

u.s. advances to play france on wednesday. they won't share the road at the ninth state of the tour de france. the car knocked one of the riders off his bike and collided with another rider sending him into a fence. both riders returned to the race but lost some precious time. it's the top of the lower. 10:00 a.m. on the east coast, 7:00 out west. one day after british tabloid news of the worldcious shut down. owner, robert murdock has not apologize ford his employees hacking her phone messages. will and kate wrap up their 11-day visit in the u.s. and can d.a. we will go live to their final stop. a live image of the u.s.

debt clock. law makers of both parties returning tore more talks on how to slash spending. we begin this morning with the high stakes and heated rhetoric of the negotiations in washington. president obama trying to broker a deal. the next hour, he turns to the public in the morning news conference. dan lothian is at the white house. let's talk about the hold up. >> the hold is because republicans and democrats can't find areas of compromise to get a deal done. you hear republicans talking about no tax hikes whatsoever. you hear democrats concerned about the fact that entitlement programs such as medicare and social security are on the table. yesterday, before the meeting with congressional lawmakers, the president was asked whether or not a deal can get done over the next 10 days. essentially, giving enough time to draft and pass legislation. the president says, we need to did you there is still a wide gap. that's why the president is not only using his bully pulpit for

the second time in two weeks holding a press conference but also calling these lawmakers back to the white house today for another round of talks. the hope that they can come with some options about what could potentially pass in both houses. i will tell you, republicans don't believe tax hikes should be any part of this equation because that's something eve foreign tfor the wealthy that they don't believe should be happening in this economic environment. >> dan, thanks so much. you have covereded the white house for so many years. i'm curious, what would be the first question you would throw out. i know you. you would be the first one to stand up and say, mr. president. >> i would be yelling at him, that's true. you want to know if this is going to be successful. one of the things the president has to do is convince the american people, why is this

really important. all these signs of crisis, is that true? how does that relate to ordinary folks? if the markets plummet, what does that mean for your 401(k). he is going to have to lay out his case in a concise but dramatic way. we have seen him do that before. he also has to convince us as well, why this big deal? he is off to make some sort of big deal, $4 trillion in cuts over four years, rather, ten years. the republicans say, let's do something a little bit shy of that, a little bit less ambitious. he has to convince folks that the reason why is 2012 elections, all these piecemeal negotiations might disappear. that's why i have to do something big. he really has to convince people that this is important, that this is important to do now and that what he is asking for in terms of sacrifice only applies to the richest americans, the wealthiest families or the guys who are flying around in the corporate jets. they can't have those tax loopholes or those subsidies.

that's the kind of case he has to make to the american people. that's what's going to put presh why yo pressure to come back to the table and get something done. this has been dragging out and dragging out. does anyone benefit from that? i think the president benefits from this dragging out until august only if they get a deal, only if they get something done. if you have the president making statements and republicans coming back and nothing happens, you have a problem. he can appear as a hero if this thing drags out and he looks like he is the grand negotiator, the one who is bipartisan, the one who has brought these members together and pushed them to move forward. if that doesn't work, we are looking at potentially what they are talking about a clause in the 14th amendment of the constitution maybe to raise the debt ceiling. we still don't know if that is even clear. so you can go ahead. >> it is mind-boggling when we

see how far in death we are. >> unbelievable. >> we are going to take it live as soon as it happens. president obama's news conference, less than an hour from now. it is scheduled for 11:00 eastern. you will see it live right here on cnn and you will be able to see suzanne malveaux talk about it once it happens. >> the death toll in a sinking of a ship in russia keeps rising. dozens still missing. zain verjee live in london. do we have any idea why the ship sank? >> reporter: there is going to be a criminal investigation but we don't know specifically what the cause is definitively. a lot of people are saying that this vessel had mechanical problems even before it started sailing. they had to postpone one of the cruzs because cruises because of it. they set sail with a problematic

engine. the ship was too overcrowded. there were 70 or 80 people jammed in that should not have been there. there were questions about whether this vessel was even properly licensed. a really tragic situation. more than 100 people believed dead. what some versions and accounts of eyewitnesses say that when the ship actually turned, it took a right turn or something and just collapsed. it took about three minutes or so to sink almost to the bottom of the ocean. people jumped out. there were cruise vessels going by and they didn't know was going on. not many people stopped to help them according to some eyewitnesses. a really awful situation in russia. it is now becoming a recovery operation, not a rescue. stunning allegations against british tabloid. the "daily mirror" reporting that staffers with the defunct

paper tried to hack into the phone of 9/11 victims. we are joined in london. murdock to deal with this apparently apologize. have we heard what he has said or if he has spoken yet? >> reporter: no. i mean, there has been no direct apology from rupert murdoch. there was an apology in the news of the world before it closed down in its last edition. this just keeps getting bigger and bigger, the "daley mirror" reporting that they tried to get contact numbers of those killed in 9/11. the evening paper in london's headlines were that the queen's police, protection officers sold the queen's phone details to "the news of the world." if that's the case, it goes to show that no one, it appears,

was immune from this hacking scandal. all the way from the queen of england to victims of 9/11 to victims of crime here to politicians and hollywood stars and celebrities. this talk of between 4,000 and 6,000 people having been targeted by this tabloid newspaper. it is pretty incredible stuff. we are waiting. there is going to be some statements in the house of commons behind me. so we may get some more information. it certainly seems an incredible story and one that may spread to other newspapers as well. that's the important thing to realize. it might not just concern one newspaper here. there may be others involved as well. >> dan, thanks. as dan pointed out, the british tabloid scandal is far from over. we are going to take a closer look at the connections between british politicians and british media executive, rupert murdoch.

country 6789 first stop, brownwood e tex fun nerl services for the guy that. >> in utah, the sales team at adaptive computing really knows how to celebrate hits its sales goal. the boss's permission, the team blew up the 1995 mitsubishi as an award for a job well done. this guy set a record in texas.

jamichael brown, weighing a whopping 16 pounds. guess what his parents said? no more kids. >> media mogul, rupert murdoch closed his "news of the world" after alglegations that the papr hacked into the phone of a missing teen. they report on the influence murdock has on politics in britain and the u.s. >> reporter: with an obama image on the cover, they endorsed david cameron for prime minister. he may not have owed his victory to the blessing of rupert murdoch's paper. in britain, at least, politicians are fascinated and frightened by murdock's political influence. >> if you are a pol significance who has papers that decide your image is wrong or your reputation and policies are wrong, you know you have an uphill struggle with about 40%

of the british media railed against you. >> reporter: it is that kind of clout that led cameron to cozy up to murdock. his political sway is so significant because his media holdings around the world are so enormous. more than 20 tv networks, 60 plus stations, dozens of newspapers. in britain, even in dropping "news of the world," he still owns the hugely successful "sun" and ""the times of london."" he owns british sky broadcasting. they are debating whether to let him buy the rest of it with concerns that it might have too much influence in one hands. in all companies, it is rupert murdoch who sets the political tone. >> he is not telling the journalists what to say but he is setting the general drift. >> reporter: his news corporation owns "the wall street journal" which some see ace the most influence newspaper and the right-leaning ""new york

post" and fox. >> you can get elected president of the united states without fox news but it helps if you are a republican not to have the opinionated hosts against you. that makes a much tougher mountain to climb. >> reporter: is it too much political influence in the hands of one media mogul. with some tv networks accused of leaning left, fox news is seen as a counter wait. in britain, it is much more serious. if he gets total control of "british sky broadcasting" that debate will get much louder. the royal couple's tour of north america is over. it was pretty busy ranging from polo matches to some very

special kids on l.a.'s toughest streets. we are going to talk to skid row and one of those students straight ahead. somewhere in america, there is a doctor that can peer somewhere in america, we've already answered some of the nation's toughest healthcare questions. and the over 60,000 people of siemens are ready to do it again. siemens. answers.

your showbiz headlines, halle berry dialed up 911 on sunday. that was her second call this weekend after spotting an intruder on her property. no arrests were made. the octomom, nadya suleman and actress, kristin johnson, on a delayed flight when suleiman's eight kids started crying. the third rock from the sun asked her to keep the babies quiet. suleiman reponded, why don't you

grow a baby and get a life. >> kate hudson and her physician husband had a baby boy over the weekend. prince william, rather, and his bride, kate, wrapping up their north american tour but not before leaving quite an impression on the folks out there in california. max foster joining me once again from l.a. max, did the royal couple make some new fans during their time there? >> they certainly did. not as many as can d.a. they didn't get a chance to meet so many members of the public. a series of events in this whirlwind tour, they won all sorts of people over. saturday, you could describe as glamour day, the polo match in the morning and the dutchess with her husband and his team won. he had a big red carpet event on the saturday night with some a-listers was there. they were excited about what the dutchess was wearing. they were nervous. it says something about the star power. a bit more low key on the

sunday. there was a missions event, meeting war veterans and helping them to get jobs after their work in the military. a very successful whirlwind tour. i am told by st. james' palace, we north going to see them for a while now because they want to lie low in north whales. in the words of the palace, they want some time to establish their new married life. certainly, after this flurry of media coverage, they are going to go quiet for a while. >> i don't know how quiet they will go. everyone has their eyes on them, watching what they are doing. max, thanks so much. the royal couple's visits to california, it wasn't all glitz and glamour. on the final day, they visited an art center for intercity kids. they went to some of the toughest streets in los angeles. we are talking about skid row. joining us now, the school's president, cynthia harness and one of its star students,

jessica kornejo. before you met will and kate, what did you think about? what did you imagine when you thought of the royal family or the royals? >> well, i thought of them as just a name, really. i didn't know too much about them. i knew that they were everywhere. i knew that everyone was focused on what dutchess katherine was wearing but like anyone else, i really just knew the name. and when i saw them at intercity arts, everything about them was just so beautiful. they exude grace and joy and humility. it is just they are humbling to be around. so full of youth. it was definitely an amazing experience. >> how did that impact you,

jessica? we are talking when you look at your school and the students that attend your school and the area that all these students come from, including yourself. these are two totally different worlds. how did will and kate inspire you? did they say anything specifically to you that sort of, i don't know, helped you maybe look at what your future may be like in a different way? >> well, they did exchange some words with us. unfortunately, we didn't get to meet them. as they were exiting the building, duke william turned and gave us two thumbs up and said, brilliant and dutchess catherine turned to us and said we were amazing. that was amazing in itself. they definitely inspired me and gave the rest of us hope by

bridging that gap between the two world's and showing the public that they do truly genuinely care about world issues and poverty and people who otherwise can't help themselves. >> you were part of the dance group, right? i am looking at video. what was that like? were you nervous? do you think they were impressed by the moves, the music. >> they were engaged. they were engaged. we were so happy, because before we got started, there were amazing audience members fully engaged, participating with the clap, with the kids. they were great. it was amazing. >> i have got to say, you have some serious moves going on there jessica. i'm impressed. cynthia, what did this do for your school. what do you do for the students? >> you can imagine if you are growing up in a neighborhood that already is described as the

homeless capital of america and then loosely called skid row, to have the most famous couple in the worldc come to see you, to see your performance and to do art with you, it uplifted everyone. one young dancer said to me, if they can visit us here, then anything is possible in my life. it was the most extraordinary experience, because in -- first of all, they did art with our younger students and were fully engaged with them. they were very playful in teasing one another about their art projects. then, went to another studio. this was all led by the students. this wasn't an adult-led tour by any means. it was all completely from the students going into regular classes. next, they went into a ceramics studio and fully engaged with the stud disand just being with

them, doing work alongside. we tried to get both of them to wear smocks, because they were beautifully dressed. william, unfortunately, didn't put one on. was a bit covered with clay by the time he left. >> that's what makes them so down to earth. you brought up a great point. it takes sometimes just a visit, just a smile, just a hand shake from somebody of that level to make such an impact on our kids. jessica, i want to point out. i saw a little salsa moves there. very impressive i love it. you got it going on. jessica kornejo, and cynthia harness, what a blessing to visit your school. cynthia, you are doing a marvelous job with that program. jessica, you are a prime example of why we need that school. best of luck to you. >> thank you. >> thank you very much. >> my honor. >> the controversy. michael bloomberg says that he puts ice in his beer. how do you get through those

bottles, the tiny neck? we are going to ask our bus panelist with the new york mayor's shocking admission that is making headlines. stay with us for president obama's news conference, 11:00 eastern is the time. you will see it live right here on cnn protect your family... and launch your dreams. at legalzoom.com we put the law on your side.

checking top stories. britain's daley mirror reporting that news of the journalists you can successfully tried to get phone reports of the 9/11 victims. the u.s. is withholding $800 million in military aid to pakistan. it is meant to pressure pakistan to crack down on militants. a heat wave could reach dangerous levels in parts of the midwest. temps are expected to go beyond 105 in 15 states. kidnapping victim, jaycee dugard, says she did what she had to do in order to survive during her 18 years in captivity. kidnapped and held in tents in a

backyard in california, she endured horrible abuse. she even gave birth to two children. now, at the age of 31, she is talking about it for the first time. >> there was not a day that i didn't cry. i felt like there would never, ever be a day that i wouldn't cry again. then, after a while, i told myself, i can't cry anymore. >> what's the most haunting memory? >> that lock, hearing the lock. i know i said that earlier but for some reason, that and the bed. it was a squeaky bed, squeaky pull-out bed. i guess the noise, the sounds. it's weird what sticks in your head but sounds. >> how did you stay sane? >> i don't know. i was still alive.

there was still hope. still hope. >> i am trying to imagine how you are coping. i am trying to imagine. >> i don't know. i can't imagine being beaten to death, you know, and you can't imagine being kidnapped and raped. it is just you just do what you have to do to survive. >> her kidnappers, phillip and nancy garrido, are serving long prison sentences. dugard's book is titled "a stolen life". tour de france riders go down in a pileup while a car knocks down another cycle lift. you will see it in sports. all four of us, together? 24. he's low fat, too, and has 5 grams of sugars. i'll believe it when i--- [ both ] oooooh... what's shakin'? [ female announcer ] as you get older, protein is an important part of staying active and strong. new ensure high protein...

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lots of talk but little agreement as washington races to avoid a looming crisis. congressional leaders are returning to the white house in

search of a deal that would slash trillions of dollars from government spending. they agreed to return to the negotiating table today. they are divided over huge philosophical differences. republicans say tax hikes are unacceptable. democrats oppose cuts to social security and medicare. 30 minutes from now, president obama will address the debt crisis, 11:00 a.m. easterntimes at a news conference at the white house and we will take it live. political buzz, a rapid fire look at the hottest political topics of the day, three seconds. cornell belcher and pete dominic and dana lohse. gop candidate, rick santorum, says the president is in, quote, denial, over debt limit negotiations. as we just mentioned, the president has a news conference in 30 minutes. what can he say to bring his critics on board? cornell? >> he can't say anything to bring critics on board like rick

santorum who want his job. the president can say, we have got to get to the table and get to a balanced approach. we have to get out of our idealogical boxes and stop kicking the can down the road. republicans can't say, we are not going to do this and that. that's why we don't solve any big problems. >> dana? >> i don't know if it is so much eye delogical differences as economic history. i am a critic of how everything is going right now i would be incredibly happy if the president said, let's look at social security and medicare and increasing the number of taxpayers. we only have 53% of americans that pay into the tax system. we need more of these people, not pass burdens on to job creators to shrink that poll. kyra, rick santorum is saying anybody is in denial is like me saying, i have the best hair on television. rick santorum is in denial.

can the president convince his critics? he has adapted their thinking. to actually start thinking like them. >> we get to interview. tim pawlenty said he is uncertain if homosexuality is biological or a choice. he said he would defer to scientists on that. how much will these wedge issues matter in 2012? >> i think right now, everyone just wants to make sure they can put food on the table and stay under their roof. we have 9.2% unemployment. at some point, these issues are going to come at the the forefront. right now, everybody is drowning. we can focus on the economy. >> cornell? >> first, pete, i have the bess the head of hair on television. i agree with dana, i think when you are afraid, people are going to be more afraid of a banker

with a foreclosure note than a couple. richard referred to him as the grand old colt in an op ed. he is a smart guy. he knows better. >> all right, guys your buzzer beater. ten seconds each. >> you didn't ask me. you never got to me, kyra. how dare you? >> i got caught up in the hair comment. okay, sit your dome down. that smooth dome. go ahead, pete. >> well, it needs to stop mattering whether home sexuality is a choice. someone should ask tim pawlenty when he chose to be straight. the real thing here we need to try to understand, kyra, whether or not that matters. homosexuality is more damaging that people that watch reality shows. i would think that that isn't damaging to society as i very well know. >> buzzer beater. >> we will continue on that in just a second, pete. hold on, michael bloomberg. he confesses, oh, no, that he

puts ice in his beer. would you actually vote for a guy that says, hey, i will have a beer on the rocks? >> dana? >> no. who puts ice in their beer. you ruin the beer. that's what icy cold beer steins are for. >> cornell? >> dana makes a good point. she puts an example of it seems so strange and odd it makes voters suspect and untrusting of you. how can you trust a guy that puts ice in his beer? >> i want to know how it gets the ice in the long neck. how did he get the ice in there? what did he do? >> i can tell you how he gets the ice in there. he is a multibillionaire. he could pay someone to crush that ice and put it in the straw. any voter who cares about what a potential president has to drink should not be allowed to vote. that's my opinion. >> ice in the beer, that's pretty big. >> thanks, guys. >> you are right, dana, it is anti-american. it is very european.

>> stick to a martini. come on. all right, guys. new rules about to go into effect to pull back the curtain on lending. alison kosik at the new york stock exchange. how does this all work and when will the new rules kick in? >> the new rules kick in next thursday and here is how it works. say a lender designs you for a loan or sticks you with less favorable terms like a high interest rate, after july 21st, here is what they are going to have to do, give you your credit score for free, usually, you have to pay. they are going to have to tell you what other factors they use to make their decision. now, they deny it and they don't tell you why and you are wondering why? now, you will get an explanation. >> let's talk about why it is such a big deal. anyone can get a credit score. you have to pay a few bucks. >> you are right. the key is you are going to know what the lender is looking at. what was the red flag for them?

not every lender uses a fico score. some use their own credit models. knowing what the problem is on your credit score can help you take measures to fix it and be on your way to when you apply again helping yourself. kyra. >> quick look at the stocks before we go, allison. >> they are tanking. the dow down 147 points. the big word of the day, debt, too much here, too much in europe. we have new worries about italy. we have a lingering hangover from a dismal jobs report on friday, the dow down 147 points. kyra? >> allison, thanks. minutes way from president obama's news conference. it is scheduled for 11:00 eastern. you can see it live right here on cnn. woman: saving for our child's college fund was getting expensive.

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stories making news later today. president obama holds a news conference at the white house on the debt reduction talks at 11:00 eastern. at 1:00 eastern, the jobs for america's summit being held at the u.s. chamber of conference in washington and katherine gray appears for a bail hearing in boston at 2:30 eastern. two republican lawmakers will be grilling their party's presidential candidates in an upcoming forum. mark preston is here to tell us the story. hey, mark. >> good morning, kyra.

steve king, the iowa congressman and senator jim demint, from south carolina, will be grilling the top republican presidential candidates on labor day. just announced this morning. the palmetto freedom forum will take place on the afternoon of labor day. it is news we reported last week. what's interesting about this presidential forum, the ability to get into it. they say that the average for the presidential candidates to qualify for this forum is 5%. potentially werks cou potentially, we could see some of the presidential candidates not qualify. labor day, we will see these two lawmakers try to get these presidential candidates to explain their positions heading into 2012. >> one of the candidates setting low expectations for the republican iowa straw poll. what's rick santorum saying. >> this is somebody that might not qualify for this presidential forum on labor day. rick santorum said that he is going to shoot to come in fourth, fifth and sixth place in

the iowa straw poll. what's interesting about this is that rick santorum is a social conservative. his whole campaign is based on trying to get social conservatives to back his campaign. iowa is a state of social conservatives. he has very low expectations and, in fact, as far as how much money he has raised in the past couple months, it is not very good. he told candy yesterday, it is going to be less than $2 million. so rick santorum, not aiming necessarily high for the iowa straw poll. he says that no matter what, he will remain in the presidential race in february. let me add one more thing. it is okay to put ice in your beer, okay? for all the purists out there, if you have a warm beer, you have got to- >> are you serious? >> doesn't that water it down? >> sure, sure. if you drink it fast enough, it won't water it down. >> mark preston, the con asewer of all things beer and ice. the u.s. is moving on to the

semi finals after one of the most exciting finishes in world cup history. the score in the final minutes of extra time tied the match at 2. the u.s. won on penalty kicks. it was clinched. the u.s. advances to play france on wednesday. a car from french tv won't share the road at the ninth stage of tour de france. it knocked one rider off his bike colliding with another rider sending him into the fence. both riders returned to the race and lost a lot of precious time. fresno grizzlies were wizards for a night in harry potter uniforms and they were auctioned off for the achievement program. just minutes away from president obama who is about to speak. our suzanne malveaux and wolf blitzer many could coming up

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live from studio 7. i'm suzanne malveaux. president obama is set to hold a news conference at the top of the hour. the white house republicans are locked in a battle over redeucing the deficit and raising the debt ceiling to keep the country in defaulting on its bills. the two sides hold more talks today after negotiations last night ended with still no agreement. good morning. i'm wolf blitzer here in washington. it sefrcertainly is a critical august deadline that's looming. the stakes are incredibly high right now for the economy and all of the political players. suzanne, there is no doubt right now that what happens over these coming hours and days could have a huge impact on every viewer out there as far as the economy is concerned. >> wolf, what's really interesting is that you have this looming deadline august 2nd. a lot of people questioning what that really means. is it going to be as some folks

have said, financial armageddon. is it going to be this kind of crisis scenario that some of the democrats are talking about, some of the economic analysts are talking about or is this more political here. i mean, there is an element of gainsm gainsmanship that certainly seems to be going on in washington. no surprise to you or i when it comes to that. >> i want to point out, though, among all of the responsible leaders in that white house cabinet room that have been meeting, they all agree, democrats and republicans, all the white house officials, to be sure, that there cannot be a default. there can be no default in the u.s. government's treasury bills. the united states is going to pay its debt one way or another but at the same time, it is not going to be easy by any means. >> i want to bring in our own ali velshi to talk a little bit about the financial aspect of all of this. ali, one of the things that we were talking about, wolf and i, is essentially, how much of this

is bluster and how much of it is real when you talk about the interest rates going up, when you talk about derailing the economic recovery, whatever recovery there is? is that really going to happen on august 2nd if we can not pay our bills? >> we can't say for sure what's really going to happen. we can say let's bring it down to the level most people can understand it. if you have bills to pay aund don't have enough money, you decide you are delaying the payment of some of them, all of your interest rates could go up. credit card companies work that way. if you breach one, the others charge you more to borourow mon. the same for the u.s., it may cost more for us to borough. so much of our money goes to interest payments that every extra dollar we spend is not going to social services or education. the bigger question here, suzanne, is remember when lehman brothers failed, it failed on a

weekend. a whole lot of smart minds decided to let it fail thinking the market would take it in stride. clearly, they didn't. internation international borrowing and lending did not. >> how is the market responding already? how are they reacting to this stalemate? >> markets are down today about 1.5%, which is a big drop. there are other reasons for that as well. we had that disappointing job reports. we have continuing debt problems in europe. now, it is bleeding into italy. so it is hard to tell when the dow is down 1% or 1.5% on the s&p. we have to come to some sort of agreement and the debt ceiling will be increased. >> thanks for watching this very closely. we are going to see what the president has to say. i want to go back to wolf. i understand you have some of

our colleagues there in washington with the politics. >> we certainly do. there is a lot of politics going on, not only the policy but the politics as well. our chief lit cal analyst, gloria bore inju gloria bo glor gloria bornlger is here. the president was it is not going to happen because the republicans don't want to go forward with any increase in what's called tax revenues. >> it is interesting, because when the vice president had his working group, they were talking about sort of a $2 trillion deal. the president doubled down and said to the house speaker kind of this is our moment. it is interesting to me, because i think that you see that john boehner and barack obama have really established a relationship that surprises many. boehner is a legislator, a

long-time legislator. it is clear he wanted to do something big and long lasting so they don't have to come back to it. each wing of their own party said, you know what, we can not go along with this. you have, for example, 230 republicans in the house who have signed a no new tax pledge. how are they going to react to any deal that changes the corporate tax rate, et cetera? they would just say no. >> the president, john king, was taking a big risk in putting social security and medicare on the table to the irritation of his democratic base. >> you have the president literally the man in the middle. sometimes you position yourself in the middle politically. that's a smart place to look. >> we used to call it a try ing gu lation. >> he is in the middle troo i go to get the republicans to give up the holy grail and get the democrats to give up their most potent political issue, medicare, and add-in social

security, an entitlement program. to the liberal base, give me some, to the republicans, give me some. it is the democrats that are grumbling. they believe in the end the president says, if they have to do it, most democrats, not all. be careful. we will have to count the votes. most democrats will be for whatever the president is for. where can you move the republicans on taxes? is it just closing loop holes. the tax rate increase is not going to happen as part of this deal right now. this is the first vivid proof of the tea party power. this is what they ran on. there are some deals cut with this president. she say, they can make a deal. this is the issue the new guys ran on. >> saw zan, there is no doubt the real issue going forward, if there is a deal between boehner and the president, what will happen to the president? most believe there will be the 16 votes they need in the senate if they need that super majority. will the house of

representatives where there is a significant republican majority, if it includes anything that could be deemed a tax increase, that legislation could be in trouble? >> that's right, wolf. you are talking about the president saying, look, i'm only going to go after the wealthiest americans, families making more than $250,000 when it comes to a tax increase or allowing their cuts to expire. i am only going to go after those that are flying the corporate jets, the tax loopholes that they have. the president is going to try to make that case, that these are limited in scope. this is a small group of the american public that's really going to be impacted when it comes to making those sacrifices, jessica yellin. she is in the briefing room. jessica, clearly, this seems to be a way to use the bully pulpit to get his message out. he is in these back door negotiations. what do we expect for him to say when he goes before the cameras?

>> reporter: people are essentially calling for asking again as we have heard in recent days to have them come together, find a compromise solution and not as he has said in the past, kick the can down the road. after yesterday's meeting, he asked leaders to come back today with something that in their view could pass both houses of congress. he wants to see some specific. in general, the point of today's press conference is to keep up the pressure in public to cut some kind of deal in private. he is going to sell the message to us. >> jessica, are you able to hear me now? >> i can hear you now. >> i want to ask you, why do you think the president believes that negotiating in public, holding this press conference, is going to be an effective way of changing people's minds or

putting pressure on people. >> reporter: americans in general are frustrating with all the leadership for not getting something done. it is just a general distaste for the process. this just looks like more, it is more gridlock. everybody ends up getting blamed to some extent for the lack of momentum here. americans in general, if you look at the polling and if you go out there and just talk to folks, want these leaders to be focusing on jobs, not on the debt. they want to be done with the debt and working on the next step. the more the president is out there talking about, let's get this done, let's resolve this so we can move on to the next thing, there is the assumption that maybe that can keep some pressure on all leaders to stay focused. obviously, anyone in politics knows that already. it is just part of the ongoing dynamic that happens here in washington. he has the bully pulpit. why not use what you got? >> i guess the sausage making happens as well behind the scenes. do we think he is going to go